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Mr. Rubin: Welcome to today's briefing on this Friday, the last day of this workweek. Let me begin with a presentation on this particular photo here. Today, the Security Council is discussing reports by the Secretary General on the Oil for Food Program and the humanitarian situation in Iraq. We wanted to take this opportunity to, where a public debate will be occurring in New York on the whole question of sanctions and the Oil for Food Program, to demonstrate a rather compelling example of how Iraq demonstrates no regard for the welfare of its own people. As you know, the Oil for Food Program keeps revenues from oil sales out of the hands of Saddam Hussein and ensures that it is spent on food and medicine and other supplies for the people. Last month, we showed a number of photos explaining how Saddam evades the Oil for Food Program by pursuing illegal gas oil smuggling to build palaces and luxury areas for himself and his cronies at a cost of billions of dollars. Today, we wanted to show you an example, much more concrete, of the threat that Saddam Hussein poses because of his willingness to spend money that he has to provide direct state sponsorship for terrorism.
This is a satellite photograph of a new headquarters complex that Saddam Hussein has built for the MEK. This is the main headquarters complex. The whole complex consists of this area all around here, and this is the main headquarters complex that's described in this larger picture. The complex is located in Falluja, which is approximately 40 kilometers west of Baghdad. Construction was begun in late 1998 and is still going on. The site covers approximately six square kilometers and includes lakes, which is this area right over here; farms, which is this irrigation area; barracks; administrative buildings and other facilities, which are primarily here. The barracks are in this area right there. The facility can accommodate, in our judgment, between 3,000 to 5,000 MEK members. The headquarters complex is still being built. When it becomes operational, in our judgment, it will be used to coordinate MEK terrorist activities and to plan attacks against targets in Iran and elsewhere. The important point here is that millions of dollars of Saddam Hussein's illegally obtained money is being focused in the effort to sponsor directly by a state terrorist organizations and terrorist activities--not to help the people of Iraq. Ironically, the gasoil smuggling occurs as a result of smuggling through Iranian waters. So Iranian officials who have allowed this gasoil smuggling to take place have generated revenues for Saddam Hussein to assist the MEK conduct terrorist activities against Iran, which is obviously ironic. In our view, without the cooperation of some Iranian officials along that waterway that I described last month, Saddam could not smuggle gasoil, and the profits from this smuggling would not be able to be used for these kinds of purposes. In our view, what this photograph demonstrates is that not only will Saddam Hussein continue to try to evade his responsibilities in giving up weapons of mass destruction, but he continues to spends his scarce resources on one of the worst activities any government can spend its money on; that is, state sponsorship of terrorism. A little background on the MEK. This organization has been around for several decades. It was driven out of its headquarters in France in 1987 and moved its base of operations to Iraq. It is estimated to possess approximately a division's worth of heavy equipment--that is, tanks, armored personnel carriers and artillery--in Iraq to conduct raids, bombings, and mortar attacks in Iran. In 1992, a number of attacks were conducted against embassies in several, almost a dozen, countries around the world. In April '99, the MEK assassinated the Chief of the Iranian Armed Forces General Staff, General Shirazi. And according to press reports, the MEK has stepped up its activities in the last several weeks. With those comments, I'd be happy to take your questions on this and other subjects. Question: What evidence does the United States have that the Iraqi Government actually paid for this place? Mr. Rubin: We believe that this kind of building that costs millions of dollars in a major area near Baghdad would not be being conducted without costs accruing to the government of Iraq, and that we have evidence that this is a building that operates the MEK activities, that the refurbishment of this site was conducted by not just the MEK but by Iraqi officials. And that is sufficient evidence for us to conclude that scarce efforts, scarce resources, scarce funds, are being focused on this effort. Question: Do you know which group bankrolls the MEK? Mr. Rubin: They get money from a variety of sources. What I'm suggesting to you-- Question: I know what you're suggesting, but I'm looking for complicity. You say the smuggling was in cooperation with Iran. Mr. Rubin: No, I said Iranian officials who turned a blind eye to smuggling who have been paid off as a result of smuggling. I didn't say-- Question: Right. Mr. Rubin: I suspect the government of Iran would want to know--not want this to go on. Question: Because, as you said, it could be the target of attacks? Mr. Rubin: Right. Question: But most terrorist groups have a variety of sources for their funds, so while Iraq may be housing them in a headquarters way-- Mr. Rubin: But it's not housing, Barry. It's rebuilding. This site was a former military site that was empty. Question: Well, forget the housing-- Mr. Rubin: It was an abandoned site. And now in the last year and a half, enormous expense has been spent to turn this from an abandoned site, an unused military facility. For example, these areas right here are abandoned buildings that were part of a military site. So all this effort has been made to build an elaborate complex--and that costs money. Question: I hear you. It was loose wording on my part. I'm just trying to find out where this terrorist group gets its money. Mr. Rubin: Well, I can look into that for you to see where they get it. We have a law in this country that prohibits fundraising by this organization, and the Justice Department is engaged in a process of trying to ensure that no one in this country provides funds to an organization that has been declared by us a terrorist organization. As far as what other sources of income this organization has, I will have to check that for you. Question: How much has Iraq funded? Mr. Rubin: I'll be happy to check that for you. Question: Have you expressed your concerns on this to the Iranians through whatever means you do talk to them, or is this how you are conveying the message? Mr. Rubin: Well, with respect to the gasoil smuggling, what has normally gone on there is the Sanctions Committee chairman has been in contact with the government of Iran about concerns about the use of Iranian waterways to smuggle gasoil. With respect to this particular issue, I'm not going to make it a practice of saying what we do or don't say in diplomatic channels but, as I understand it, this photograph has now just been released, right now, for dissemination. Question: Jamie, you knew about this for a while and you said the construction started in 1998. Mr. Rubin: Right. Question: Why are you declassifying these documents now? Is it to push the Iranian Government to stop the smuggling or is it further to prove your good intention, the government of American's intention, towards the Iranian people in line with Madame Secretary's speech of last week? Mr. Rubin: No, this has nothing to do with the Secretary of State's speech. We have been organizing this effort for several weeks now. It is very hard to get a photograph like this declassified, I can assure you, and it's been going on by those officials who work on the Iraq problem, not those who work on the Iran problem. The motivation is very pure and very simple, and we hope very honest. Today, a debate is going on in the Security Council about how Iraq spends its money, with many countries challenging and many individuals challenging sanctions. We think to the extent that we can prove, number one, the danger of letting Saddam Hussein have money at his disposal and, number two, the perversity with which he allocates his resources, that it will help our case internationally for maintaining the strongest possible coalition for sanctions. That is what this is about, and we think that this information demonstrates that Saddam Hussein will not only spend scarce resources hiding, rebuilding facilities for his military, but also doing what the whole world recognizes is and should be a taboo, which is sponsoring by a state of terrorist organizations. And we think that is what is significant about this information. Question: What evidence do you have that the money that you say Saddam has used to rebuild that facility in fact came from the smuggled oil? Mr. Rubin: The irony that I was describing is a generalized irony. We don't have direct information that the x-million dollars from this particular oil smuggling was spent on this particular facility. But we know that Saddam has a limited ability to get money. Basically, he has a few different ways: taxes, black market activity, kickbacks on government contracts and gasoil smuggling. And those are the main ways that he earns hard currency. The ones that can be affected from the outside are, obviously, the gasoil smuggling. So to the extent one wants to squeeze his revenue base and limit his choices about where to spend it, one would want to limit his gasoil smuggling. Question: Is it conceivable, though, that that facility was built with one of the other two sources of revenue? Mr. Rubin: Absolutely. Absolutely. It's conceivable. There is no way really to know that. Money to a certain extent is fungible. What I am indicating is there are only a few sources of money for a regime under this kind of sanction, and it is ironic that the Iranian officials would be giving additional resources to the regime when some of those resources could well have been directed towards this kind of support for a terrorist organization that conducts terrorist attacks against Iran. That is the irony that I was describing. Question: There is a lot of Iranians in this country. Some of them have been identified with the Mujahedin in the past. Is the FBI pursuing the possibility that money is being transferred, collected and transferred for the MEK? Mr. Rubin: I am sorry that a particular correspondent wasn't here today for me to answer this question, but perhaps he will be reading this transcript. The NCR, the National Council for the Resistance, has been designated as an alias for the MEK, a designated foreign terrorist organization. The Antiterrorism and Effective Death Penalty Act of 1996 makes it illegal to knowingly donate money or provide material support or resources to a designated organization and generally bans the issuance if visas to those organizations. It also requires financial institutions to freeze funds in which such organizations have an interest. We will vigorously enforce the law against designated foreign terrorist organizations and all those who knowingly provide them material support or resources. Material support or resources includes funds, facilities, and most other physical assets. The provision that allows us to freeze these assets, however, does not give us the--the government--statutory authority to freeze all assets or to seize offices belonging to a designated group. That is for you, Jonathan Wright. Only funds are subject to freezing. There are complex legal issues involved in enforcing this Act. The Department of Justice is prepared to answer questions concerning criminal enforcement of this particular law. There have been successful prosecutions of certain violations, but I am not in a position to talk about the details for legal reasons. Question: Jamie, you've been asked to relate this in some way to the new overtures to Iran. I mean, in the Secretary's speech she spoke of how both Iran and the US have been wronged by Iraq and that there is a joint interest the two have in the Gulf region. Could you somehow--is there a relationship here? Mr. Rubin: I was asked this question earlier and I am indicating there is no relationship. Question: (Inaudible) - targeted? Is this-- Mr. Rubin: We are doing this for one reason and one reason alone, and that is to demonstrate to the world the way in which Saddam Hussein spends his scarce resources to sponsor--through state sponsorship, terrorist organizations. That is what this is about. It has no relationship to the Secretary's speech. Question: What evidence do you have? I mean, this is only 40 kilometers from Baghdad, which has never been that far away from the Iranian borders. What evidence do you have that Mujahedin-e Khalq are using it and not Saddam's forces? Mr. Rubin: We have very concrete evidence that convinces us compellingly that this is the MEK headquarters and not an office for Saddam Hussein's forces. I am not a position to get into the evidence, but I think our evidence is quite compelling. Question: Do you have anything that--(inaudible)--it's one of theirs? Mr. Rubin: And certainly the MEK has publicized its ability to have such offices in Baghdad. Question: This group has large meetings in England and in Europe and has lots of people who are contributing money to it abroad. What evidence do you have that that money is not the money that built this facility? Mr. Rubin: Well, I think before you walked in we had a discussion about the fungibility of money. And what I was indicating was that we believe that Iraqi officials have spent scarce resources, either in the form of construction or land or funds, that they have complained they don't have to build hospitals, to deal with oil equipment. Every time you see an Iraqi lament list, "Here are all the things we can't do," think about all the effort that went into helping this modern administrative facility be created and know that all of these efforts that obviously went into this from an old military base could have gone into humanitarian needs. That is the point we are making. We can't rule out that the MEK paid for part of this, but clearly scarce Iraqi resources were devoted to this effort; that is, state sponsorship of terrorism, rather than to the effort of providing schools or medicine or electricity or all the other Iraqi laments that they have about their fate. Question: If I could follow up, I don't follow your reasoning at all because-- Mr. Rubin: I thought it was quite compelling. Question: Yeah. You know, you're saying there's no indication--that you have no knowledge how much of this was paid for from funds from abroad, yet you're saying there is compelling evidence that they're using scant resources. That doesn't sort of match. I mean, for all we know, all of it was paid for by funds from abroad. Mr. Rubin: Right. We think that significant resources from Iraq were devoted to this effort and that it could not have occurred--a building doesn't come up from the desert like this from an abandoned military base and sprout into this rather modern administrative facility, in our judgment, without significant resources from the Iraqi regime being devoted to it. Question: Do you have any idea how much the facility cost to build? Mr. Rubin: Our estimate is that this kind of facility takes tens of millions of dollars to construct. Question: Do you have any idea, again, how much of it would have had to come--you said a significant amount, but I mean are we talking like greater than 50 percent? Mr. Rubin: I can't give you a numerical figure at this point, but we will look into that for you. Question: What is the feeling: elation or wait-and-see on whether the anti-terrorism people are going to get the airplane they've been trying to get from Congress? Mr. Rubin: I'll have to check that for you. Question: I thought you knew about the to-and-fro'ing on the Hill over the funds. Mr. Rubin: Right. I just have to check that for you. Question: Representative Gary Ackerman of New York leads a large group of people in the Congress that have asked the United States to stop calling this group a terrorist group, and they say that this group, MEK/NCR, is a legitimate anti - you know, to change the government, that they're for democracy. Could you comment on that? Mr. Rubin: Well, as a New Yorker I sure hope I can still go to his district, but we respectfully disagree with Congressman Ackerman. We have designated this group a foreign terrorist organization and, in fact, Americans have been killed by the activities of this organization. Congressman Ackerman is familiar with the legal justification, the elaborate legal justification, that we have used to make this designation. We are aware of his difference of opinion, but we intend to continue to follow the law and continue to designate it as a foreign terrorist organization. With respect to the question of an aircraft, the administration has agreed that a Boeing 757 would be the most suitable aircraft to replace the 37-year-old converted tanker now used by the forward emergency support team coordinated by the Department of State. The Air Force procurement section of the pending emergency supplemental appropriations bill for Kosovo and Colombia contains funding for this specially configured aircraft, and it obviously contains other funding requests of importance to us, and we believe this plane to help us deal with anti-terrorism problems and to deal with terrorism as it occurs is another reason why we hope the Senate will move expeditiously on the bill. Question: The last point is you're not sure that they will? Mr. Rubin: Right. Question: And wasn't there some disagreement before the type of plane was the consensus choice? Mr. Rubin: You mean an interagency disagreement? Question: God forbid. "Disarray" is what the New York Times used to do. Mr. Rubin: Disagreement, disarray. Well, you know, the administration I've been working in has never, ever had a disagreement. That was a joke. Question: One more question, just because you were very specific in your numbers between 3- to 5,000 thousand people would be in that barracks. Mr. Rubin: That's an estimate based on the number of people that could sleep in that area, the number of buildings, and our judgment of what similar facilities involved in the past. That's a judgment. Question: Where are they now, these people? Are they in Iraq? Mr. Rubin: There are thousands of MEK supporters in Iraq. I indicated to you they have a division's worth of equipment, and that's well more than 3,000 to 5,000. So we believe there are such people in Iraq of that order of magnitude of numbers. [end of excerpt] Full transcript of Daily Press Briefing on 3/24/00
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